In the parliamentary elections of 2009, the second such elections held in Montenegro since it declared independence in 2006, the ruling Coalition for a European Montenegro, headed by Prime Minister Milo Djukanovic, won 48 of the 81 seats. The victory also extended the rule of Djukanovic, who had been in power for nearly 20 years (as either prime minister or president). Voter turnout in the March election was 66%.

A supporter of Milo Djukanovic holds up a portrait of the Montenegrin prime minister during an …

Savo Prelevic—AFP/Getty Images

Parliament adopted more than 100 laws in an effort to build the country’s legal framework, and it also worked toward achieving a political consensus on European integration issues. In December 2008 Montenegro had officially submitted its application for membership in the EU and was expecting admission in 2012. Several polls indicated that a majority of Montenegrins backed integration. In its annual report the European Commission noted that Montenegro had made progress in addressing the political criteria needed for EU membership but warned that the government needed to “intensify its efforts so as to consolidate the rule of law” and to “fight against corruption and organised crime.” In November the EU lifted visa restrictions for Montenegro. In December NATO offered the country a formal plan to join the alliance, but only 30% of Montenegrins favoured joining NATO. Montenegro also increased its regional activities by fostering bilateral relations with other countries and promoting cross-border cooperation.

The global economic downturn significantly affected Montenegro. The IMF and the World Bank predicted that the country’s GDP would contract by 2.7% in 2009 and that the economy would remain in recession through 2010. In June more than 11,000 businesses reported debts totaling a record-breaking $188 million. Unemployment rose slightly over the 2008 rate of 11%.

Industrial production dropped by 20% in the first half of 2009. The country’s largest employer, the aluminum plant Kombinat Aluminijuma Podgorica (KAP), owed more than $280 million to foreign and local banks and about $50 million to the government and state companies. KAP was the republic’s largest exporter, accounting for 40% of industrial production, and more than 100 small- and medium-sized companies directly depended on its operations.

Service-sector employment continued to increase; in 2009 more than 70% of the labour force worked in tourism, construction, or trade. A large portion of the nearly $560 million in foreign investment made during the first half of the year was in services. Tourism continued to grow. The government passed legislation making the country more attractive to private investors and developers, and the World Travel and Tourism Council ranked Montenegro as a top tourism destination.

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